Failure is near, Tastykake accountants warn

Joseph N. DiStefano

Posted:
Thursday, October 17, 2013, 3:04 PM

Shares of Tasty Baking Co., maker of Tastykakes, slipped to a 28-year low today after the Philadelphia snack bakery told the SEC in this filing late Friday that "the Company is unable to file" its 2010 annual report on schedule because it's busy trying to sell the firm.

In January the company said it had made deals with its banks, state agencies, landlord Liberty Property Trust, and other creditors to delay payments while it looks for a buyer to take over the company or some other "possible strategic and financial option."

That followed the failure of Tasty's new state-subsidized South Philadelphia bakery to meet initial sales targets; higher ingredient costs; and the bankruptcy of A&P, a major supermarket customer. The creditors gave Tasty until June 30.

The company said it still hopes to file its annual report within the next two weeks. But it warned it's likely to "include an explanatory paragraph from the Company’s independent registered public accounting firm expressing substantial doubt about the Company’s ability to continue as a going concern."

Mexican-owned Group Bimbo (whose US operations are based in Montgomery County) and Georgia-based Flowers Foods (which has been in Tastykake merger talks before) are among the possible buyers, as I wrote in January.

We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.

Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy:

Philly.com comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by Philly.com staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.